No way of pay of paying unsecured personal debt

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Kerrigan

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I am aware of a case where there is over 100k in unsecured personal debt. The debtor has engaged a PIP who has suggested a bankruptcy type procedure. The couple are hesitant as bankruptcy will hinder any future job prospects.

Mortgage is paid up to date, no arrears but in negative equity.

Debt collection companies are beginning to chase and couple are considering not paying their mortgage.

Any pointers please to stave off the debt collection companies.
 
Kerrigan said:
I am aware of a case where there is over 100k in unsecured personal debt. The debtor has engaged a PIP who has suggested a bankruptcy type procedure. The couple are hesitant as bankruptcy will hinder any future job prospects.

Mortgage is paid up to date, no arrears but in negative equity.

Debt collection companies are beginning to chase and couple are considering not paying their mortgage.

Any pointers please to stave off the debt collection companies.
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If it is a case that the mortgage is als0 unsustainable , then bankruptcy gives closure to all debt.

If it is a case that mortgage is sustainable (albeit in neg equity) then unsecured are in a quandary.

In relation to unsecured debt .
1. Write to unsecured people and outline your financial position. If you are sure of your financial position, advise them you have nil free funds to pay anything except mortgage.
2. Supply them with all info that they feel is necessary for them to make a decision.
3. It is probable they will try to (squeeze) some funds from you.(pay nothing).
4. Avoid all phone calls , keep copies,keep everything in writing.
5. Always engage,always show your willingness to pay (if you had funds).

Remember if you ain,t got the money, you can,t pay them.

Some Debt companies can (bully) a bit , but please keep your cool.

You mentioned Bankruptcy may harm job prospects? Can I suggest not as much as being chased and chased into the future?
Go for closure.
 
Thanks Gerry. Yes mortgage is sustainable and their bank has agreed it sustainable. Mortgage and living expenses are taking up the bulk of their earnings.

What will happen when creditors see that there is nothing left to pay them?
 
If they can honestly show that
1.They have NIL free income
2. They have been open and honest.
There is then no incentive in unsecured people chasing them.
Depending on what each unsecured is owed , they might go for Judgement against them, what that means is if they come into extra funds eg inheritance over the next 12 years the unsecured may look for that.
In usual practise the Court Judgement (fades) away over the years.
If there are any (free) funds atall ,the unsecured might negotiate.But please ensure the agreement is final and they can actually afford it.Too often peoples optimism mean they agree more than is feasible over an agreed term. They need closure, the unsecured need closure.
The problem with judgments though mean that it would be dificult to raise finance in future.
 
Thanks Gerry. They have a fear of Court so I'm guessing if it comes to judgement they are not obliged to attend Court?? Is such a Judgment expensive to obtain? Will their mortgage provider be informed and if so cause complications? One of the debt collectors have advised them that they are not obliged to engage but if they don't they will have the Courts force them too!
 
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